Difference Between Stablecoins and Bitcoin

Last Updated : Sep 5, 2022 / By Sandeep Bhandari / Fact Checked / 3 mins

Stablecoin's value remains constant at $1.00. The value of Stablecoin fluctuates in predictable ways. Stablecoins are controlled by a single entity.

Bitcoin is available for purchase at anything from $0.05 to $20,000. It's hard to anticipate how Bitcoin's value will fluctuate in the future. Bitcoins are a decentralised currency.

Comparison Table Between Stablecoins and Bitcoin

What are Stablecoins?

A stablecoin is the newest type of evolving cryptocurrency. It aims at providing price stability by using a reserve asset as a backer.

Despite being too popular, the values of Bitcoins keep on changing frequently. For example, it climbed from roughly $5,950 in November of last year to over $19,700 in December.

A currency should primarily serve as a medium of monetary exchange and a means of storing monetary value, with its value remaining relatively steady over longer periods.

What is Bitcoin?

Bitcoin belongs to the family of digital currencies.

A tremendous amount of computational power validates all bitcoin transactions. These digital type of currencies are neither backed or issued by any financial institution or governments forums.

The abbreviation for Bitcoin is "BTC." The system of bitcoin consists of a network of computers, which are also called "miners" or "nodes". A blockchain can be viewed as a collection of blocks in very systematic and metaphorical terms. Many people having higher investment plans and big businesses sometimes do their transactions via Bitcoins. The reason behind is, a small change in value in either increasing or decreasing way won't affect them much.

Main Differences Between Stablecoins and Bitcoin

1. Stablecoins are regulated. On the other hand, Bitcoins are unregulated.
2. Stablecoins are used and can be used for real-life use and transactions as well. However, Bitcoins are used for exchange or trading, Educated gambling, payments, etc.

Conclusion

Stablecoins are the future of Crypto, not Bitcoin payments. In terms of crypto discourse, market capitalisation, and investment trades, Bitcoin continues to lead the way.

Cryptocurrencies and their applications are constantly evolving and updating. However, bitcoin has dominated the conversation thus far. Price volatility (particularly upward volatility) attracts and draws attention, and it also leads to increased financial interest and discussion.

References

1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3326823
2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3605451